Michael Nierenberg and the New Residential Investment Corp
The 55-year-old Michael Nierenberg is the President, Chief Executive Officer and board Chairman of New Residential Investment Corp, listed in the stock exchange market as NRZ. NRZ is a company based in New York and focuses on managing and investing in residential mortgage-related assets in the United States. A popular investor in Mortgage Servicing Rights, popularly known as MSR, the company operates through Servicing and Originations, Consumer Loan Segments and Residential Securities.
New Mortgage Lending Solutions
With the current wave of change in the mortgage industry, different mortgage choices have arisen which involve loans beyond the traditional qualified mortgage definitions. This means that the mortgages provided do not have to meet lending standards established by various federal government agencies. New Residential Investment Corp under Michael Nierenberg blends both qualified mortgage (QM) and non-qualified mortgage. It acquired NewRez, a loan origination company, qualified to operate in 49 states which provides both QM and non-QM. New Residential also combines multiple real estate loans into marketable security thereby creating securitized mortgages. The firm led by Michael Nierenberg has increased their role in the overall mortgage market even though banks are doing otherwise due to the 2007 financial crisis. Since it is a non-bank mortgage servicing company, handles loan delinquency differently as opposed to banks who emphasizes forced sales of assets and foreclosures.
Investing in Servicer Advances
Servicer advances, whose fee originates from the basic fee of a mortgage servicing right, is a type of duty that ensures a mortgage servicer is compensated. They are non-interest bearing, and a servicer is only paid back the cash payments he might have had incurred for the borrower. This is normally when a borrower does not make the scheduled payment due on a mortgage loan or when a servicer is faced with the task of supporting the value of the asset being used as collateral. New Residential Investment Corp provides one with a chance to invest in servicer advances since they focus on actively managing and investing in fields related to residential real estate whereby servicer advances fall. With an objective to manipulate the existing expertise in the firm for shareholders benefits, Michael Nierenberg believes that the advances will provide a fertile opportunity for NRZ to invest in core servicing assets which generate higher yields.